Rover Corporation is a regular corporation that has not elected S corporation status. In 1994,

Rover earns $100,000; in 1995, Rover distributes $50,000 to its shareholders.

Which of the
following best describes the tax consequences to Rover and its shareholders?
A) Rover is taxed on $100,000 in 1994; the shareholders are not subject to tax
B) The shareholders are taxed on $100,000 in 1994; Rover is not subject to tax
C) Rover is taxed on $100,000 in 1994; the shareholders are taxed on $50,000 in 1994
D) Rover is taxed on $100,000 in 1994; the shareholders are taxed on $50,000 in 1995
E) Neither Rover nor its shareholders are subject to tax.


D

Business

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